Why Are We Paying Too Much for Our Energy Bills

This week on the Kiran Trivedi blog I ask what the recent news that the energy market is over regulated means for your personal finances.

Energy Bills Just Keep on Going Up!

I regularly talk about the impact of energy bills on your personal finances. If you are looking to live on a budget, you’ll have zero chance of success if you don’t think about how much you need to pay for electricity, gas etc. every month.

But as of late, that hasn’t been easy. It seems that energy bills in the UK have been constantly rising over the last few years. This means that not only are energy expenses putting more pressure on your personal finances than ever, but they are harder to predict.

Consequently, this makes it harder to budget for energy expenses, further effecting your personal finances. That’s why I thought you Kiran Trivedi readers would be interested to know that the reason you are paying high energy bills could be because there is too much red tape in the energy market.

Energy Regulation since 2008 Too Aggressive?

According to the BBC, five former regulators went on record last week suggesting that too much regulation could have stopped competition among energy suppliers, in turn keeping energy prices high for households across the UK.

Specifically, they suggested that regulation since 2008 has been too aggressive. This conclusion comes in light of recent Ofgem findings, which suggest that energy suppliers have been able to continue to raise their prices, free from any competitive pressure, even whilst wholesale prices were falling.

Ofgem Responds to Regulator Criticism

Ofgem responded to the criticism, saying it would pay “close attention.” However the regulator went on to deny that things were fine before 2008, but took a turn for the worse when after the date they adopted a more interventionist approach.

A spokesman for Ofgem said: "Many of the current problems with retail competition in the energy market were showing before 2008 and the regulatory and policy environment has changed significantly since then."

Switch to a Low Cost Energy Supplier

So is more regulation the reason your energy bills are so high? Maybe, I’m not sure yet. What I am sure of Kiran Trivedi readers, is that the Big Six energy companies provide poor value formoney. That is why I would suggest that if you’re looking to protect your personal finances, you switch to a low cost energy provider today! 

If you wish to talk to Kiran Trivedi about my articles or just chat about finance, you can contact me here.

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If you’ve had a Power Cut, You Could be in for a Bigger Pay Out!

It turns out Kiran Trivedi readers, that if you’ve had a power cut, it may not hit your personal finances as much as you might think, as you might get a bigger pay out!

Time is Money People!

You may not think that a power cut has the ability to weaken your personal finances. After all, its energy you’re not paying for, because you’re not using it. However I would argue that if you go without power for longer enough, it can seriously damage your bottom line.

Remember the old adage; time is money? Well think about 24 hours without power. Think about 24 hours where you can’t turn the lights on, go onto the internet etc. That’s a lot of time wasted, and you and up being a lot less productive. It can end up really squeezing your schedule, and thus costing you money.

With Power Cuts Coming More Often, Compensation Just had to be raised

And the situation seems to have gotten worse lately, Call it global warming, call it whatever you want, but we seem to be having more power cuts than ever lately. In the wake of the storms that rocked the nation last holiday season, over 16,000 homes in Southern England went without power for a staggering two whole days.

Now it seems that energy regulator Ofgem, in light of recent events, see things the way I do. According to the BBC, the regulator has decided this week, to lift the minimum customer pay out for consumers who go without energy for at least 24 hours. They have raised it from £24 to £70.

“There are Lessons that Have Got to be learned.”

Ofgem’s Maxine Frerk commented on the matter to the BBC. Frerk said: "There are lessons that have got to be learned for the future - both about getting some customers reconnected faster, but most importantly about the communications with customers, so that they can get through, find out what's happening and get some sense of when they're likely to be back on supply." 

Notably, the news site went on to reveal that the energy regulator was already particularly displeased with energy company SSE, along with power distribution firm UKPN. Between them, they’ve already had to pay out £4.7 million in compensation to those most badly affected by the holiday storms.

What Does This Mean for Your Personal Finances?

So what does it mean for your personal finances, Kiran Trivedi followers? First off, it means you need to remember that if you go for power longer than 24 hours, you’re entitled to more compensation. Secondly, it means that this will likely prompt the energy companies to supply a more effective service, which will hopefully have a positive effect on your bottom line. 

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Kiran Trivedi’s Top Five Ways Scottish Independence Could Impact Your Bank Balance

Whatever side of the debate you’re on, Kiran Trivedi readers, if Scottish Independence is achieved through this year’s referendum, it could impact your bottom line both positively and negatively, and you need to know about it.  That is why this week on the Kiran Trivedi blog, I’ve detailed my top five ways Scottish independence could impact your bank balance.

Leaders on both sides of the argument have been banging on about how Scottish independence could affect the economy, and it shouldn’t surprise you that it could affect you. Here are the top five ways Scottish independence could impact your bank balance.

An Independent Scotland: The Top Five from Kiran Trivedi

1)      Energy: This is a real concern, considering how high energy prices are already. Scottish independence means that we have less households shouldering the cost of nuclear power, which means energy prices could very well go up.

2)      Taxes: There’s no evidence to categorically suggest that a Scotland free of the rest of the UK would mean higher taxes for all of us, but it could do. If Scotland, for example, don’t take their share of national debt, taxes will go up most likely to offset the difference.

3)      Jobs: This could actually be a huge plus south of the border, as public sector jobs currently based in Scotland could very well have to move back to the rest of the UK, which would actually boost the economy and increase the average person’s spending power.

4)      Tuition Fees: This is one for you students out there. It’s entirely feasible that if Scotland breaks away, then UK students will pay Scottish prices to attend their universities, as is normal for foreign study. Scotland has lower university fees, which would benefit any student who wants to study north of Hadrian’s Wall.

5)      Postage: Believe it or not, stamps could actually be cheaper for the rest of us, should Scotland flee the Union. This is due to us no longer having to pay for postal delivery to Scotland, a cost traditionally covered by stamp prices.

So, as we have seen, Scotland breaking away could have good and bad effects on your personal finances, and should they do so, you need to know about them. However it’s all just conjecture at the moment and we won’t know how it’ll play out until this September! There will be updates on the Kiran Trivedi blog.

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Why Should You Desert the ‘Big Six?’

If you get your energy from one of the ‘big six’ energy companies, and most people in Britain do, then you’ll know that they charge heaven and earth for their services. Saying that, Kiran Trivedi readers, why should you desert the ‘big six?’

Did you know that the annual household energy bill now runs up £1,264, and that only covers gas and electric? Why do you think that is? Is it because it simply costs that much to bring energy to your house? Whilst energy costs are rising all over Europe, they’ve risen much more steeply over here.

The thing is that they shouldn’t. In Britain we’re a lot more energy independent than Europe, as we don’t depend on Russia for our gas and oil and we have a growing renewable energy sector, which means that costs really shouldn’t be that bad. Furthermore, the fact that American shale oil and gas is flooding the market at the moment should make things even cheaper.

The thing is that the ‘big six’ don’t seem to be taking any of this into account. We see this best through the energy prices row last year. Labour leader Ed Miliband suggested that if he got into power then he would impose a 20 month energy price freeze.

The big six went mad. They immediately denounced any such strategy, saying that it costs too much to supply the country with energy as it is and that it why they are raising prices. They also rose prices again to circumvent such measures.

The actions of the big six from there show that they haven’t really got consumers best interests at heart, and that is why you need to desert them. In the end, the energy prices row stopped and not only did most of the big six not lower their prices, they also convinced the government to cutback the ECO Funding scheme; which provided energy efficiency measures designed to cut household energy bills.

This is why you should switch to a smaller energy company if you want to more effectively manage your personal finances. It’s logical really. Because they’re a small company they can’t afford to alienate their customers, which means that they have policies that mean that you get cheaper energy.

We have seen this recently with small energy company Ovo. Based on the usage of dual fuel by a medium user, the energy company has pledged to get energy bills to under £1,000 a year. This has prompted large energy firm SSE to say that they are freezing prices until 2016, showing that they really don’t need to raise prices to keep themselves afloat.

That’s why you need to desert the big six energy companies, Kiran Trivedi readers. They clearly don’t have your best interests at heart because they’re so big that they don’t need to. Switch to a smaller energy company if you want to more effectively handle your personal finances.

LINK TO INFO: http://www.bbc.co.uk/news/business-26947756

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